What Are the 7 Proven Principles of Business Success?
The American economic system is one of the most vibrant and successful in the world. This is to some extent due to the country's entrepreneurial spirit, which encourages creative, ambitious individuals to take risks in order to find success. However, there are also established principles of business success that can be applied by anyone looking for more stability in their work.
This post will outline what these principles are, and how they have been instrumental in shaping American business practices.
1. Competition is More Than Just a Business Strategy
There are many theories as to why businesses in the United States are so successful compared to those in other economies. From the existence of patent and copyright legislation, which encourages innovation and advancement, to the more recent rise of disruptive technologies such as smartphones and social media, there are many ways that America's business sector has been ahead of other countries for centuries.
However, one aspect is often overlooked: competition. While this may not seem like a big deal at first glance, it has had a significant effect in terms of America's business practices since its inception.
In fact, many of the country's most successful companies are also some of its oldest. Businesses such as Walmart and Starbucks have set themselves in direct competition with other companies in their own industries, often driving price down and quality up in order to outdo their rivals.
Furthermore, American businesses are not just competing against each other; they are competing against the rest of the world. As a result, they have had to keep ahead of trends, constantly innovate, and respond to problems quickly. This has given them a reputation for being dynamic and cutting-edge – a designation that is crucial for success in almost any business sector.
2. Competition Is Not Only About the Business
It is perhaps not surprising that competition has played such a prominent role in American business practices. After all, the United States is a country that champions individual competitive spirit, and it has been heavily influenced by the legacy of capitalism. This school of thought strongly encourages businesses to compete against each other, on the idea that this will push them to improve quality and provide more value for their customers.
However, what isn't understood too often is that competition can also be translated into ethical terms. The term "competition" can be used as a means of motivating yourself and others to work harder, to avoid complacency and give your best every time you need to deliver something.
While this may seem like a subtle difference in meaning, it is a very important one – and one that many businesses ignore at their peril. As noted by management expert Peter Drucker: "Competition will make you ruthless. When everybody is competing, nobody wins. It's that simple."
3. People Are Important to the Success of a Business
One of the most important principles that has served as inspiration for many American businesses is that of customer satisfaction. In fact, this was frequently cited as one of the reasons why Walmart was able to succeed despite being so diverse and large, due to the company's ability to adapt to changing customer demands over time.
For example, when Walmart first opened in 1962, customers would typically be expected to leave their cars in the parking lot as they shopped. However, this changed as the business grew and as more and more customers began taking advantage of the company's huge range of products. This meant that having a large stock of cars on site would be impractical for most customers, so later on the company came up with a solution: repossessing cars that were parked illegally.
This is just one example of how Walmart has adapted to changing customer demands over time, while certainly making sure they were still providing their customers with what they needed at all times. Other companies have also followed suit. For example, Hyatt Hotels has also adopted a similar business model, as it began building larger hotel properties as the demand for them grew.
This shows that American businesses understand that humans – customers and otherwise – are important to their success. In fact, they are willing to change in order to meet customer demands. This has helped push many American companies into the lead when compared to other economies around the world.
4. Transparency Is Also Important When It Comes To Business Success
Another important principle of business is transparency. The United States has a long tradition of making its government more open than some of its competitors, which can help encourage people to trust it with their money and their secrets. This doesn't mean that U.S. businesses do not face problems, but it does mean that there is a greater level of trust in the country's business sector than in other countries.
In fact, many businesses around the world have adopted some level of transparency as part of their business practices. This is largely due to the United States' influence abroad, but it also stems from the idea that being transparent with your dealings can work wonders for your reputation and that of your company. It also helps people feel more confident investing in your business since they know where they stand.
Furthermore, as a study by Harvard shows: "When executives are transparent about both bad and good news, companies perform better and experience improved stock returns."
5. Businesses Shouldn't Only Invest in Security
One of the biggest mistakes that businesses today can make is to ignore the importance of security. After all, disruptive technologies and high-profile attacks have made security a major point of concern for businesses of all sizes. While many companies understand this and have begun using improved information systems to combat it, others are still lagging behind.
However, this doesn’t mean that businesses should only invest in ways to secure their business from outside threats. Businesses need to encourage a culture that understands how important security is – and how it can be harnessed for good. For example, some companies have introduced a policy of “bug bounties” which can be given out to those who uncover soft spots for hackers to exploit.
Other companies have started hiring people with security and cyber skills, so that they are ready to respond to attacks or other types of threats. For example, IT giant IBM has been one of the leaders in implementing new security systems in order to keep up with changing trends.
Ultimately, it is important for American businesses not only to be aware of their security needs but also to make sure that they are acted on in time.
Conclusion
While the United States has a wide range of business models that have helped it achieve its reputation as one of the best places in the world to do business, it also has certain principles and practices that help businesses become more effective. This can be a great way to motivate staff, as well as encourage people to trust American businesses with their money.
This is why these American principles are not only important for businesses but also for investors. The same principle applies here: why would you want to invest in an industry whose practices you don’t agree with? You would be much better off investing in one whose values you agree with than one that does not have any.